Barcelona were also believed to be keen on taking the Spaniard back to the Nou Camp from Bayern Munich.
But Thiago’s father, Mazinho, has detailed the talks he held with PSG over a move for the new Reds star with brother Rafinha eventually making the switch.
Mazinho told France Football: “I had already spoken with Leonardo a while ago, but it was for Thiago. Leonardo wanted to sign him for PSG, but Thiago had already found an agreement with Liverpool.
“We then spoke about Rafa but he wasn’t part of Leonardo’s plans at that moment. I think that he must have thought about it, that he realised the nature of the opportunity and that it would be a coup to sign him.
“When he began talks again (the day before the end of the window), Leonardo had changed his mind. And everything accelerated on the final day.
“It was on Monday that we had to work hard to convince both clubs. We were scared, but thanks to God, five or six hours before the deadline, we found an agreement.
“Leonardo wanted Thiago, he got Rafinha. And for Rafa, it was a dream to join such a club.”
Thiago was delighted to join Liverpool, saying: “I am excited not just to wait to play here, but also to train with my teammates, to get to know the coach and what he wants, how the team plays.
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“I want to help the guys if I can help them to be even better than they are, and I can be better than I am. It would be so nice and I hope for that.”
He is currently out injured having suffered a knock during the Merseyside derby and is expected to miss tonight’s Champions League clash with Atalanta.